Sergei Magnitsky's widow, Natalia Zharikova, grieves over her husband's body during his funeral in Moscow in 2009. Magnitsky died of heart failure in prison, state prosecutors said, but the Kremlin’s human rights commission also found that he had been beaten. Photograph: Mikhail Voskresensky/Reuters

Sergei Magnitsky, a lawyer, will face charges of tax fraud that his friends and family say are fabricated. He will not actually face them at all, though: Magnitsky has been dead since 2009.

He was arrested the year before after concluding a multimillion-dollar corruption investigation that pointed the finger at a host of low-level Russian officials. Like thousands of other Russians each year, he never came out.

Unknown to the public when he was alive, Magnitsky's name has come to symbolise the deep ills that haunt Russia since his death – its Kafkaesque justice system, its torturous prisons and even its vengeful foreign policy.

When the United States passed a bill banning those involved in Magnitsky's death from entering or even keeping bank accounts in the US, Moscow responded by banning Russian orphans from being adopted by Americans.

Kremlin anger at the Magnitsky bill, now being considered in countries across Europe, has dominated domestic politics since the turn of the year.

"We found their achilles heel," said William Browder, head of Hermitage Capital Management and Magnitsky's former employer, who has launched a global campaign to avenge his death. "Following the money and freezing the money is by far the most effective tool there is when dealing with a kleptocracy."

Browder, who is based in London, was once Vladimir Putin's biggest fan, becoming the largest portfolio investor in Russia by the end of Putin's first term in 2004.

Self-confident and brusque, he fought for minority shareholder rights in his search for profit and, apparently, went too far when his attention turned to Gazprom, the state gas monopoly. He was suddenly banned from Russia in 2006 as a threat to national security.

Security forces raided his firm's Moscow offices the following year and Hermitage was accused of underpaying its taxes. Magnitsky, an auditor and lawyer at the Moscow law firm Firestone Duncan, was hired by Browder to investigate.

Instead of uncovering wrongdoing at Hermitage, Magnitsky found that a ring of police officers and tax inspectors had taken their tax payments – and kept them for themselves, becoming enormously, if secretly, wealthy.

He reported the fraud to the state – and was then arrested himself.

Behind the Magnitsky case lie thousands upon thousands of similar ones, activists say. Men and women are being sent to Russian prisons in droves, many of them as the result of falsified cases organised by business rivals or vengeful officials. There they face violence, poor treatment and psychological pressure, activists say.

Magnitsky died at the age of 37 after being refused treatment for painful ailments he developed in pre-trial detention. A report by the Kremlin's human rights commission also found signs that he had been beaten.

With its unlikely twists and incomprehensible turns, Magnitsky's case would stand out if it were not so similar to thousands of others. Once a week, in the backrooms and basements of Moscow cafes, a group called "Russia Behind Bars" meets. It was started in 2008 by Olga Romanova, a journalist whose husband, a businessman called Alexey Kozlov, was jailed on made-up charges.

First, women whose husbands had also been unjustly jailed attended the meetings. Now it has spread to include former convicts, and any relatives seeking help, becoming something of a support group.

"I don't want to show them what can happen to their sons and husbands," Romanova said during a recent meeting, hiding her laptop from view. On the screen were medical photographs – the body of a man with a bloody gash splitting his head, then a picture of his neck showing the bruises that appeared from a belt placed to make his death, his relatives say, appear like a suicide.

According to officials, 4,121 people died in Russian prisons and pre-trial detention centres last year – 11 a day. Activists, mistrustful of official statistics, believe the number to be much higher.

Romanova points to a woman in a red dress – "That woman? Four men were killed in her son's jail in one month alone. She's ready for anything."

Russia's prison system, infamous in Soviet times, remains little changed. A man, who asked to be identified only as Alexander, said: "Nothing has changed and sometimes I think it's even worse." Alexander was arrested in 2005 on fraud charges designed by a former business partner seeking to avoid charges herself. He was given parole in May 2011 after serving half of an 11-year sentence.

"Sometimes I think it would be better if they just shot us," Alexander said. "Because when you are shot, people mourn for a year. When the court brands a person, his life is broken.

"And we're not jailed alone, but with relatives, wives, parents."

Alexander tried to kill himself inside Moscow's notorious Matrosskaya Tishina detention centre, the same one that held Magnitsky. "I felt that my life was over," he said. "The attitude [towards prisoners] is: 'I'm a prisoner, I can't be taken seriously, I'm always lying and breaking the rules, I already have no rights.'"

"Anything can happen there," he said.

That is one of the messages Browder is trying to convey to leaders around the world, as he seeks to punish those who allowed his lawyer to die in the absence of the hope of justice in Russia.

Browder said: "We became aware of prison conditions pretty quickly after he was arrested but the full extent of the torture and the horror only became clear to us after he died. Russia is a closed system.

They never expected any of this information on the torture and mistreatment of prisoners to ever see the light of day.

"One thing Sergei's death has done is brought a transparent window into the Russian judicial and penal system for everyone to see what's going on there – it's a very unpleasant picture," he said.

As Russia got ready to launch the trial on Monday, the authorities announced that they would charge Browder with illegally buying shares in Gazprom.

The next day, state-run television ran a propaganda film accusing him of working for MI6 and organising the murders of business partners.

Exasperated, Browder said: "It's all complete and utter nonsense."

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